While the economy was strong, and the real estate market in most of the country followed suit, at least to an extent, the luxury market didn’t fare as well.
One example was New York City. For years, the New York market was a model of thriving luxury real estate, but in the past couple of years, that’s changed. There was a 16% decline in the contracts signed for homes in Manhattan priced at $4 million or more. The deals totaled $7.65 billion, which was the lowest level since 2012.
One of the biggest drivers of the luxury market a few years ago were foreign buyers, but tax law changes in New York and other luxury markets have severely dampened that trend.
When it comes to marketing luxury real estate, it’s challenging. Not only do you have to target the right audiences, but you also have to understand that luxury real estate is a highly subjective term—more so than any other area of real estate.
Another challenge of luxury real estate is the fact that homeowners of these properties can often afford to make what would traditionally be seen as bad business decisions. For example, if they have a misstep in negotiations, it won’t affect them like it would other buyers.
With the challenges in mind, the following are some ways to market luxury real estate in the modern world, under current economic conditions.
Agents Should Specialize
If you’re a real estate agent and you focus on the luxury market, or it’s a market you’d like to break into, think about how you can make yourself distinctive. You should drill down to a very specific niche, and if possible, go for extra training or certifications in this area.
Develop a Psychological Profile
When you’re marketing lower-end real estate, it can be easier to figure out what a buyer wants. There are standard features such as garage storage or outdoor entertaining space that will broadly appeal to many buyers.
With luxury buyers, figuring out what they’re most interested in and driven by can be more challenging.
You can’t try to cast the widest net when it comes to luxury real estate because it’s just not going to work.
Things like a great school system may not be a big selling point either, because when it comes to the luxury market, buyers might just pay for the school they want their children to attend.
You really have to find those particular elements of a property that are unique, and then build psychological profiles around the ideal buyer. You have to put yourself outside of the typical pain points for a buyer and realize that these may not be the same things a luxury buyer thinks about.
You’ll have to consider things like legal issues as well in this market.
Study Luxury Agents
If you’re in the luxury market and you want to market a specific property, or just build your skills in general, look at luxury agents who are succeeding in this area. See what they’re doing, and what they’re not doing.
What do their websites look like, and how do they make use of social media? How do they market not only their properties but themselves?
A big part of marketing luxury real estate relies on you as an agent looking and acting the part. This means that you try and see not only their websites and marketing materials but look to their clothing and their style of speaking.
Cultivate a Sense of Exclusivity
Luxury buyers like things that feel exclusive, so build your marketing around this concept. One example of doing this is avoiding public open houses. Instead, do appointment-only showings.
This builds the sense that a potential buyer is special for even getting to see the property, plus you’re not wasting your time on buyers who aren’t serious or qualified.
You may have to adjust your mindset somewhat when it comes to marketing luxury real estate. It’s not about how many people come through as it might be in the lower-end market. Instead, it’s about connecting with the right people.
The right buyers for a luxury property are more than likely not going to come to an open house that’s open to the public.
Finally, for each luxury property, you are listing, build a brand for it. This means that perhaps you even go the extra mile and purchase logos for the properties and you build out a complete set of marketing materials with the home’s branding front and center.